I might get some hate mail for this but any idiot knows you can’t retain talent without paying for it. Here’s where I insult government employees. Now that AIG has been given upwards of $160 the tax payer’s stake is 80%. AIG employees are in essence government employees. Would talented individuals choose to work there without the prospect of compensation that rewards their talent? 

On Squawk Box yesterday Jack Welch discussed the need for leaders of the new partner in these giant ailing firms, the government, to act like business people. The following excerpt comes from The Welch Way (http://www.welchway.com/)
 and sums up his comments on CNBC:

There is a lot of heat over the AIG bonuses. Without commenting on specific bonuses, I want to comment on the process... People have to understand that the government is now the majority owner of AIG. They have paid 165 billion dollars and now own 80% of the company.  They are, in effect, responsible for the governance of the institution. The CEO and government representatives (like a corporate board and the CEO) have to work together on issues like investment strategy and compensation matters. They can't be public critics (second guessers) of their (and our) company. Tearing the institution apart with carping will not improve our chances of getting our money back.
-Jack Welch, March 17, 2009

Now apparently AIG was contractually bound to pay these bonuses, some of which for employees who no longer work for the company. The money was supposedly left out of the agreement between AIG and the government.  That’s something I would throw stones at.  Also, I need to mention that the bonuses amounted to much less than 1% of the money received from the government.
If we are worried about percentages of bailout money, I suppose it’s time to ask why there is any current focus on initiatives that are unrelated (in any way) to the economic crisis at hand, initiatives that also cost tax payer dollars.

If you know me at all you know I idolize Larry Kudlow. As interesting and provocative his opinion may be, it’s one that no one has yet pointed out. He says the investor is partly responsible for his or her losses because he or she is responsible for due diligence. I mention that because I believe a more outrageous issue to be the suggestion that the government should aid in recouping losses realized by Madoff investors.

Politics are making a mountain out of this mole hill. I agree with Welch that the accusatory approach is counter-productive and this isn’t the only issue that’s creating division among constituents. It is exacerbated by the administration’s America-splitting pronouncement that spreading wealth is a great idea, and is confirmed by the attention showered upon energy, healthcare, etc. initiatives in a time of economic crisis.

In spite of the public’s outrage the market still managed another positive day. Consensus is that we are in a bear market rally that could last a few more days just to add to the disappointment when it’s over. Just thought I would vent a little. Thanks for listening.